Wanting to refinance his home, which was slightly over a year old, Michael Fox was surprised to find out the worth of his home with its newly installed radiant heat system, which was completed after the initial closing.
“We had backup forced-air heat for the first closing,” said Fox. “The forced-air [system] was in the builder’s contract, which I decided to leave as is.”
After the radiant system was completed, an appraiser hired by Fox’s credit union came out for the appraisal, but she did not bring good news.
“She [the appraiser] found out that we had radiant heating and responded, ‘That can be a deduction in value.’ I was astonished. I asked her why she felt it was a deduction. She responded that she had known of radiant systems to leak. She said she had lived in a Warwick, RI, development which had radiant systems, most of which leaked.”
APPLES VS. ORANGESAccording to the appraiser, who asked not to be identified, she was aware of the problems of radiant heat in the Warwick development, which was completed in the 1950s, using copper tubing in a slab with no oxygen barrier. But, she said, that did not bear on the appraisal of Fox’s home.
The appraiser said this is a matter of “comparing apples to oranges.” She agreed that radiant has come a long way since the 1950s, but that the Fox home was a different story.
“The second heating system was an ‘incurred expense’ that would not be returned by the current market,” she said. “This was not a matter of radiant heat devaluing the home. It just didn’t add value.
“I don’t know anyone who would pay $10,000 for a second heating system. Having [a radiant heat system] doesn’t devalue the home. It simply didn’t add value in this case.”
Fox didn’t see it that way. When the appraisal report came back, the Fox house was valued at $258,000, “far less than the starting price in our development of $290,000,” he said.
“I was outraged. What struck me was the difference in the prices and that I would have to be stuck with a lower-valued home.”
So Fox asked his credit union to send out a second appraiser and agreed to pay for a second appraisal fee. The appraiser, Tom Ryan of nearby Lincoln, showed up “and loved our home,” said Fox.
“He was well-educated in the advantages of radiant heating as well as its advances in recent years,” said Fox. “The appraisal came back at $335,000. This made a substantial difference in our lives. Over the course of the mortgage, we shaved $72,000 off of the amortization schedule.”
Ryan did not return phone calls placed by The News.
Fox said that the discrepancy between the two appraisals points out the difference between someone who knows the difference between conventional and radiant heating.
“It is time for appraisers, builders, and everyone else to learn about the benefits of adding radiant heat to the home,” he said.
Hall is business management editor. He can be reached at 734-542-6214; 734-542-6215 (fax); firstname.lastname@example.org (e-mail).
Publication date: 05/06/2002